Thales Alenia Space Has Record Year, CEO Talks Why – Satellite Today

[Via Satellite 12-17-2015] Thales Alenia Space had its most profitable year in existence as a satellite manufacturer in 2015, bringing in revenue numbers that stand in contrast to current market conditions. 2015 was slow for orders of new geostationary telecommunications satellites around the world for various reasons, but according to Jean Loic Galle, CEO of Thales Alenia Space, this did not undercut the company’s growth.

“Thales had a very solid 2015 year in terms of bookings. We will exceed by far our budget. The budget was 2.1 billion euros. We will be much above that,” Galle told Via Satellite. “It is the highest number in the history of Thales Alenia Space.”

Satellite manufacturers have noted a decline in telecommunications satellite orders for Geostationary Earth Orbit (GEO). Part of this could be the increase in Non-Geostationary (NGSO) activity — Thales Alenia Space did recently log an order for eight Medium Earth Orbit (MEO) satellites from O3b Networks — and another could be talk of oversupply in large markets such as Asia and Latin America. On average, around 20 GEO satellites are ordered annually, but 2015 is well behind that number.

“To my knowledge, so far this year since Dec. 1 only 13 or 14 GEO satellites on the open commercial market have been ordered, which is a very low figure. I doubt we will reach 20 satellites ordered at the end of this year. Probably some will be booked in December by manufacturers, but not seven. That means at the end of the year we will be at a very low figure for GEO satellites,” said Galle.

Regarding Thales Alenia Space’s steadfastness in the midst of this environment, Galle attributed the company’s banner year to three things: increased Research and Development (R&D), the culmination of a multi-year competitiveness plan, and the introduction of new products. Galle said the manufacturer increased R&D spending twofold in the three and a half years since he became CEO to improve technology and satellite performance. The two-year competitiveness plan reduced the overall cost of direct and indirect General and Administrative Expense (G&A) by more than 20 percent. And with support from the French Space Agency (CNES), the European Space Agency (ESA) and others, Thales Alenia Space introduced the Spacebus NEO platform and made its first sale to Eutelsat for the Eutelsat African Broadband satellite. This combined with a favorable trade rate between the euro and the U.S. dollar all benefited the company.

Something that did not factor in, according to Galle, was the absence of Export Import Bank of America (Ex-Im Bank), which was rendered incapable of financially supporting new satellite orders to U.S. manufacturers when its charter expired June 30.

“Probably, the main impact of the Ex-Im Bank [lapse] is that some customers who wanted to buy a U.S. satellite are postponing their projects,” Galle explained. “To my knowledge and as far as Thales is concerned, we didn’t see projects that switched from U.S. manufacturers to European.”

The U.S. government reauthorized Ex-Im Bank in early December, but requires a quorum from its board of directors for transactions above $10 million. Quorum is reached when three of five members are present, and as of yet, not all nominees have been confirmed.

Thales Alenia Space has a significant amount of NGSO business strengthening the company as well. In addition to the O3b order, the company is building more than 70 satellites for the Iridium Next constellation. Galle said the first batch of 10 Iridium Next satellites is slated for delivery in the first half of 2016, with the next to follow in the second half. Thales Alenia Space is also a partner with LeoSat, conducting a feasibility study with the new company on designing a constellation of 80 to 120 small satellites for Business-to-Business (B2B) communications. Galle said this is moving forward.

“LeoSat has decided to accelerate its studies, especially the architecture of the system and the design of the satellites … we hope to start the next contract phases for the manufacturing and deployment of the entire constellation within one year,” he said.

Galle said Thales Alenia Space will continue to invest heavily in R&D, and that the company has more than 70 projects of varying size ongoing today. Research includes optical links for satellites, photonics payloads, and electrical propulsion, among other things. Thales Alenia Space has also opened a plant for 3-D printing and the use of robots in integrating satellites, and is studying ground systems to support mega-constellations.

Galle said Thales Alenia Space has many goals for next year, including selling three more Spacebus NEO satellites, a new optical Earth Observation (EO) satellite and a new radar satellite. In addition to Spacebus NEO, the company introduced a new product for remote sensing customers called Earth Observer for optical and Synthetic Aperture Radar (SAR) missions.

Galle described boosting the capability of High Throughput Satellites (HTS) and introducing more flexibility into spacecraft as top goals for the future. Thales Alenia Space is working on reconfigurable payloads that can adapt to evolving markets in order to address new customers or areas of demand. Galle said this development is taking place mainly through software. He also stressed that flexible satellites and HTS are not opposites and that Thales Alenia Space will seek to bring the two together.

“The goal is to have satellites that reach a terabyte per second. Today we are not there. We are more at 200 to 300 Gbps, but we are working internally on technologies in orbit to reach before 2020 terabyte GEO HTS satellites,” he said.

Last month Thales Alenia Space also shipped the first ExoMars research spacecraft for its March 2016 Proton launch, which Galle said presented new technical challenges in building, such as extremely durable solar arrays. He said the company would not call the two-part mission — which consists of the Trace Gas Orbiter and the Schiaparelli Entry, Descent and Landing Demonstrator Module (EMD) — a success until the capsule reaches the Martian soil. He anticipates there could be technologies developed through ExoMars that might benefit future commercial spacecraft.

“Most of the technologies developed are specific for the mission to Mars and/or to similar exploration projects but clearly the management and engineering know-how acquired on the project can certainly help to enhance the company competitiveness on the future telecom and Earth observation projects,” he said.